The Fed's rate cut may not immediately benefit car buyers or sales.

• The Federal Reserve's decision to lower interest rates may increase new vehicle sales, but not as rapidly or significantly as some anticipate.
• Nearly 15% is the average auto loan rate for a used car or truck, while new vehicle loans continue to hover above 9.61%, according to Cox Automotive.
• Longer-term bond yields, which are influenced by loan performance, can cause auto loan changes to be delayed.

The Federal Reserve's decision to lower interest rates for the first time in over four years is predicted to increase new vehicle sales, though not as rapidly or significantly as some anticipate.

The recent rate cut of 50 basis points will not immediately affect auto loan rates, which remain high at more than 9.61% for a new vehicle and nearly 14% for a used car or truck, according to Cox Automotive.

"According to Cox Automotive chief economist Jonathan Smoke, if the Fed's forecasts are accurate, we will experience rates more than two and a half points higher than the majority of the past 24 years. While this may indicate an improvement from the current conditions, affordability challenges will not be resolved by this new rate path."

According to Smoke, the biggest improvement in auto loan rates is not expected until early next year. Unlike the decline in home loan costs in recent months, auto loan rate changes are influenced by longer-term bond yields that are based on loan performance.

The Board of Governors of the Federal Reserve System reported that auto loan 30-day delinquency rates have increased significantly in recent years, although they are still below the peak levels of the Great Recession. Despite this, auto loan delinquency rates have surpassed pre-pandemic levels by approximately 60 basis points as of the end of 2023.

High interest rates, near-record-high average new vehicle prices, and inflated used vehicle prices continue to pose challenges for consumers. Although these prices have decreased from their peaks during the Covid pandemic and supply chain issues, they remain higher than historical levels.

In August 2021, the average financing for a new vehicle was over $40,700, with a payoff term of 68.8 months, or 5.7 years. This is higher than the average financing before the pandemic of approximately $33,000 over 69.7 months, or 5.8 years, in September 2019.

According to Edmunds, the difference in payments between the deals is $3,162, which amounts to $178 more per month.

American car shoppers faced affordability challenges in Q3 due to historically elevated prices and interest rates, resulting in a slight decline in new vehicle sales, according to Jessica Caldwell, Edmunds' head of insights.

If the rates continue to decrease, consumers will experience a reduction in monthly payments. BofA Securities estimates that each point decrease in the Fed benchmark rate results in a roughly $20 decrease in an average monthly payment for a new vehicle.

— CNBC's Michael Bloom contributed to this report.